The pros and cons of living in Iceland: Everything you need to know

Elves, trolls, volcanoes and more: Everything you need to know about living in Iceland as an expat…

Expat life is only getting more popular these days.

With the fallout from Brexit still a long way from being fully sorted, and the perpetual, seemingly intractable political conflict ongoing in the U.S., it’s no surprise that lots of people from those countries are considering setting up shop elsewhere as an expat.

It’s getting easier to pull off living overseas too.

Remote work is on the rise around the globe as companies seek to lower costs and become more nimble and responsive.

And with the globalization of high-speed internet and low-cost travel, more and more people are seeing that there is simply no good reason to limit themselves to a humdrum life staring at the same old cubicle walls in their home country.

The wide, wild world is calling, and one of the wilder—and more popular—places where people answer that call is Iceland.

Living in Iceland: Without compare

As anyone who has ever visited this stunning Nordic country knows, living in Iceland even for a short time is incomparable.

You’ve got Instagram-ready vistas of rugged beauty surrounding you on every side, kind and beautiful citizenry welcoming you to their land, a sophisticated nightlife and thumping music scene, and pristine cities in the Nordic/Scandinavian tradition of orderliness and attention to detail.

But the benefits of living in Iceland go way beyond hiking near epic volcanoes, visiting steaming geysers and hot springs, dining in Michelin-starred restaurants and dancing the night away to some of the best DJ and club music in the world.

Here we’ll lay out all the pros and cons of living in Iceland as an expat, and give you a rough guide of what to expect if you decide to make the jump and move to the place that magical creatures like fairies, trolls, and Bjork call home.

Living in Iceland: Quick facts

Iceland is an island nation located where the Arctic and North Atlantic Oceans meet, a bewitching place that legends and ancient manuscripts say was first settled in 874 AD by Norwegian explorers.

While it’s true that Iceland may have been settled first by Norsemen, and was ruled for a long while by Denmark, it’s actually closer to Scotland (470 mi, 750 km away) than Norway and mainland Europe (600 mi, 970 km) by over a hundred miles.

It’s also closer to Greenland, considered part of North America, than it is to Europe — and by a lot too, at only 180 mi (270km) away. Nevertheless, Iceland is generally considered a part of Europe due to the variety of cultural, linguistic, political and historical connections it has.

Living in Iceland: Yes, it’s icy, but it’s steamy and lava-y too

You might think that the country’s name and location make it sound like living in Iceland could get rather cold.

Well, it does.

After all, Iceland is just shouting distance from the Arctic Circle, so a great suntan is definitely not on the list of the benefits of living in Iceland.

Do keep in mind, however, that it’s warmer here than you might think. The Gulf Stream warms the island considerably, keeping its coastal regions more or less permanently ice-free despite the northerly location.

Technically, Iceland has a subarctic climate, similar to what you find in the Aleutian Islands of Alaska or Tierra del Fuego in South America. The high latitude and marine climate keep the air pretty chilly despite the influence of the North Atlantic current.

While the record high temperature ever recorded in Iceland is 30.5 ºC (86.9 ºF), in summers you’ll find the average high temperature only reaches into the mid-50s ºF (11 — 13 ºC) along the southern coast, the warmest part of the country.

However, the average lows in winter don’t get much below freezing thanks to the warming effect of the ocean current.

Cold? Hop in a geyser, or a volcano

Being located at the juncture of the North American and European geological plates is what gives Iceland its signature dramatic volcanoes and geysers.

The interior of the island is made up of lava fields, glaciers, and mountains, a glorious playground for the outdoors enthusiast.

That geothermal energy also produces some of the world’s most sought-after hot springs, and in fact goes a long way to providing the people living in Iceland with heat and electricity.

And if you’re thinking about living in Iceland as a way to find yourself some solitude, you might be on the right track. The country is one of the least densely-populated nations in the world, home to just 360,000 residents in an area spanning 40,000 square miles (103,000 square km).

Overall, in fact, Iceland is the most sparsely populated nation in Europe. But if you’re looking for even more solitude, head north once you’re living in Iceland to the wild interior and northern coast — over two-thirds of the population lives in the southern part of the island.

The pros and cons of living in Iceland

The Pros: Living in Iceland is beautiful

One area where you aren’t likely to find a lot of disagreement when it comes to discussing living in Iceland pros and cons is the natural beauty of the country.

Travelers dating back to the very first explorers and the hardy Norwegian sailors who finally settled here in the 9th century have long extolled the scenic beauty of Iceland.

To this day tourists flock to the island to see the fjords on the eastern coast, the rugged beauty of remote Grimsey Island to the north, and even Mt. Esja, visible from the center of the capital Reykjavik.

And while it is generally considered a part of the larger community of Nordic nations (but not necessarily part of Scandinavia) Iceland is really quite unique when it comes to the landscapes and geography.

You can discover some of the country’s 130 looming volcanoes, many of which are still active today, as well as sprawling lava fields, steaming geysers, glaciers, and even rolling green hills as well as the aforementioned fjords.

The snowy interior of the island means that skiers, snowshoers and other winter sports enthusiasts looking to emigrate to Iceland are in for a treat.

What’s more, Iceland is located far enough to the north that seeing the Northern Lights is much more likely than in many of its relatively more southerly Nordic neighbors.

With all that stunning, striking, and mysterious-looking natural beauty, it’s no wonder that most people in Iceland either believe in, or at least don’t deny the existence of fairies, trolls, and other magical creatures!

And of course we shouldn’t forget the surrounding ocean.

Sailing, fishing, scuba diving, whale-watching and all sorts of water-related activities are a huge part of life here, as well as a big tourist draw — and with good reason.

The relatively remote location of the country means that marine life can be found in a much more wild and undisturbed state than in Europe or the U.K., a big plus for water buffs who are considering the benefits of living in Iceland.

Living in Iceland means living with beautiful people too

Of course the legendarily aquiline, blond-haired and blue-eyed Nordic features of Icelandic people are well-known — even if the reality is you will also encounter plenty of equally good-looking Icelanders who have darker features.

But in addition to being surrounded by the physical beauty of the people, living in Iceland also means you’ll be living among a population reputed to be some of the kindest, most welcoming humans on earth.

There is a great emphasis placed on the family in Iceland, and that extends to the way the people here view their neighbors, even those who are more recently arrived than others who may have been living in Iceland for generations.

And as far as actual nuclear families are concerned, you’d be hard-pressed to find a place to live that has a better focus on community and parents helping other parents with the responsibilities of child-rearing.

And good news for the U.K. or U.S. expat wondering is it easy to move to Iceland: English is pretty much universally spoken. People from English-speaking countries will have a leg up when it comes to getting themselves integrated upon arrival in Iceland.

In addition to the native Icelandic, Danish is also pretty much universal for the native people living in Iceland.

Iceland is good for humans

Another huge mark in the plus column when it comes to the benefits of living in Iceland is the country’s consistently high rankings in citizen satisfaction.

One measure, the Human Development Index (source), which considers factors like literacy rate, life expectancy and even GDP per capita, has seen Iceland often coming in ahead of much larger, wealthier nations like Norway, Australia and even Canada.

In fact, in 2007-2008, Iceland ranked number one in the world on the index, although that ranking dropped somewhat after the global economic crisis later that same year.

But Iceland has since recovered economically with spectacular results.

Perhaps more importantly, the country also does quite well on the perhaps better-known World Happiness Report.

Iceland came in at Number 4 in 2019 behind only Nordic neighbors Finland, Denmark and Norway in categories like income, social support, freedom, trust in government and safety.

And it’s peaceful in Iceland too. According to the 2011 Global Peace Index, Iceland ranks as the most peaceful nation in the whole world, due to having no armed forces, zero military spending, low crime rate and high tolerance for others.

If you’re living in Iceland, tolerance and equality are vital

People emigrating to Iceland and even just short-term visitors are quick to note that the nation is often one of the most tolerant they’ve ever encountered.

There’s a long-standing tradition of striving for egalitarian outcomes that is integral to the Nordic/Scandinavian culture, and Iceland is firmly a part of that.

Here you’ll find a strong sense of equality throughout the culture, and the nation boasts an overall level of income equality that is near the highest in the world.

Furthermore, Iceland enjoys a widely-heralded freedom of religion, and those living in Iceland report that people of all faiths are not only tolerated, but accepted and even celebrated.

Also, while there is considerable pride in local culture, and the people and institutions take care to promote and celebrate the unique culture of Iceland as separate from that of the rest of the world—and especially the rest of the Nordic world—nonetheless, there are remarkably few reports of racist or other intolerant attitudes or attacks.

And living in Iceland also means an equal footing for women. The gender balance in Iceland’s parliament is nearly split evenly between men and women.

In fact the current Prime Minister of Iceland is Katrín Jakobsdóttir, a politician and former journalist who has served as Iceland’s second female prime minister since November 2017.

Iceland is also extremely tolerant of LGBTQ+ people, and the annual Pride Festival in Reykjavik is a yearly celebratory highlight for Icelandic people of all ages, sexual orientations, and backgrounds.

Living and working in Iceland: Job availability

Unlike many other Nordic countries, Iceland seems to be perpetually on the hunt for people to fill jobs.

In spite of the devastating financial crisis of a few years ago that continues to resonate in the economies of many OECD nations, Iceland’s economy is booming. That means high wages and lots of employment opportunities.

Now, keep in mind that the available jobs may not always be for work in your ideal position.

Lots of people who are new to living in Iceland report that the jobs they are finding available are lower-end positions in the service industry or similar industries, and that they are often for more entry-level type of work.

That said, living and working in Iceland as an expat is likely to be easier right off the bat than in many other countries where work is much harder to find.

Living expenses in Iceland: Utilities are cheap, but that’s the only thing that is

In comparison to other parts of Europe, the U.K. and the U.S., household bills for people living in Iceland are much lower. When it comes to paying for heating, electricity, water and other utilities, expats emigrating to Iceland find that they can save a ton of money.

By harnessing the island nation’s natural geothermal power sources, the government of Iceland has ensured that the people living in Iceland don’t have to pay exorbitant fees for utilities, nor do they have to contribute to global warming and pollution unnecessarily by burning fossil fuels.

However! That does NOT apply to the rest of your costs for living in Iceland. Read on…

Con: Overall, the cost of living in Iceland is high

Unfortunately, like its Nordic relatives, the cost of living in Iceland is quite high. According to Expatistan, living expenses in Iceland are the 2nd-highest in all of Western Europe, and are actually the 6th highest in the world.

In Reykjavik, you can expect to pay 232,178 ISK (Icelandic krona) per month for a furnished 900 sq ft apartment in an average neighborhood, which works out to about US$1,800 or £1,400 per month.

Dinner out for two at a neighborhood pub might run you about 6,300 ISK (US$49, £38) while dinner at a nice restaurant in an expat area, including apps, main course, wine and dessert would be about double that.

The ever-important beer index (which I just invented) tells us that a half-liter beer at a neighborhood pub will cost you about 1,141 ISK (US$9, £7) so at least you’ve got that going for you while you’re weeping over how much you’re paying in rent.

Con: The quality of food

A common complaint from people who are living in Iceland as a foreigner is that the quality and selection of food there is quite limited and just plain bad in comparison to that of the U.K., U.S., or most of the rest of the E.U.

Much of the food people eat on a daily basis in Iceland is imported of course, meaning that if you want any kind of vegetables or fruits, it will likely be frozen or have survived a trip there on a container ship that may or may not have been kind to its overall quality.

But even beyond that, a common complaint of expats living in Iceland is that even the cheese and meat you can find in the supermarket is of low quality, which is strange considering how many sheep and they have (twice as many sheep as people call Iceland home).

One blogger who identified themselves as an expat from Holland calls Iceland the “land of the junk food,” adding that “the main dishes of the country are hot dogs and hamburgers.”

Another point this blogger raises is that there is indeed plenty of fresh fish available to those living in Iceland — logical, what with the country being surrounded by water and the fishing industry providing 40 percent of Iceland’s export earnings.

However, the problem is apparently that fresh fish is nonetheless often prohibitively expensive, at least anecdotally. (Keep in mind that that post was from 2014. Other expats say that while the food in Iceland is still bad, it is improving.)

Con: Living expenses in Iceland include high taxes

Like its Nordic neighbors, people living in Iceland enjoy tremendous health care, social services, and government assistance on all manner of fronts. However, the downside is you don’t get something for nothing, i.e. taxes are pretty high.

And not just on what you earn in the workplace — remember that it is an island nation and most everything has to be imported. So virtually everything you buy in any type of store is going to have additional costs attached to it to offset the import duties.

That applies too if you are one of those people addicted to ordering from Amazon or Alibaba; oftentimes the import duties on stuff you order can rival the cost of the actual item itself — or even be higher.

Con: Immigration is tricky

Unless you’re lucky enough to find an Icelander who is willing to marry you or you plan to attend university here, most expats looking at living and working in Iceland are going to find that jumping through the hoops to get a legal resident card is pretty difficult.

You have to remember that Iceland is a very small but also very well-off country, and that historically it is a very insular community of people who make up the populace — it’s just 360,000 people total after all!

So they’re not going to make it easy for just anyone to come there to live, use their precious resources, enjoy the government services Icelandic taxes pay for, and take jobs away from Icelanders.

That said, do remember that the people here are nevertheless very friendly. It’s not like this is a country that has a big anti-immigrant cohort among the population; no one is talking about building a wall around the island to keep foreigners out or anything stupid like that.

Just be prepared to do your due diligence, and to be patient when it comes to the immigration process.

Here are a few greatresources with plenty of pertinent links inside which lay out in detail the steps you need to take, as well as pointing you toward the requisite forms and government offices you’ll need to deal with if you want to try living in Iceland as an expat long-term.

Cons: Living and working in Iceland means long hours

In comparison to other Scandinavian countries and even the rest of Europe, people living and working in Iceland work very long hours.

For instance, you will find most Danish workers literally out the door of the office at 5pm sharp — and often home by 2:30 on Fridays. And much like in Denmark, in Iceland’s culturally closest neighbor Norway, the average work week is only 33 hours.

In Iceland they do things around the office very differently. The work culture involves staying much later and burning the midnight oil — in fact, men work an average of 47 hours per week, and women around 37 hours.

Keep in mind, the total yearly average for hours worked for Icelanders is 1697 hours, which is still well below that of the rest of the OECD countries, where most people work 1749 hours per year.

Still, if you’re thinking about living and working in Iceland, don’t plan on cutting out early very often to hit the gym or go to happy hour!

The bottom line

Taken all together, most expats who have made a go of living and working in Iceland will tell you it was well worth whatever difficulties they might have encountered.

As you add up the pros and cons of living in Iceland and consider making the jump yourself, keep in mind that for most people living in Iceland as an expat, the natural beauty and other positives outweigh the hassles of migrating to Iceland.

Kurt is a journalist who attended the University of Colorado at Boulder and wrote for area newspapers like The Denver Post for years before taking his love of travel on the road. He's spent the past four years living in Chile, Spain, France, the U.K. and Montenegro, although his love of all things Scandinavian is paramount. Kurt also hosts Dirtbagtraveler.org